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-versus- G.R. No. L-19017

December 27, 1963





On November 25, 1960, the National Brewery and Allied Industries

Labor Union of the Philippines (PAFLU) filed before the Court of
First Instance of Manila against the San Miguel Brewery, Inc. a
complaint alleging, among others, that said union and the company
entered into a collective bargaining agreement on October 2, 1959
effective for a period of three years ending on June 30, 1962, Section
7, Article VII of which provides: “The Company agrees to pay the
basic daily rates of those workers within the bargaining unit who may
participate in the Labor Day parade held on May 1st of every year;
that plaintiff’s mother union decided to hold its Labor Day parade in
the morning of May 1, 1960 at the Balintawak Monument at Grace
Park, Caloocan, Rizal; that about 600 members of the union joined
and participated in said parade whose total basic daily wage amounts
to P3,900.00; that the company knew that the members of the union
participated in the parade and so the union demanded the payment to
said members of their basic wages for that day; that the company
refused to honor its obligation in bad faith and because of such
refusal the union is entitled to collect from the company actual or
compensatory damages, as well as moral and exemplary damages.
Hence, the union prayed that judgment be rendered against said
company for the payment of (a) the sum of P3,900.00, with legal
interest thereon from May 1, 1961; (b) the sum of P3,900.00 as actual
and compensatory damages; (c) the sum of P100,000.00 as moral
damages; (d) exemplary or corrective damages in the discretion of the
court; and (e) the sum of P6,000.00 as attorney’s fees. chanroblespublishingcompany

The company in its answer set up special and affirmative defenses.

Among the latter, the company alleged that (a) the union has no cause
of action against the company, and (b) the court has no jurisdiction
over the subject matter of the action. With regard to the first ground,
the company contends that the union is not the real party in interest
but the individual members whose right to recover the one day’s wage
is personal to them. As regards the question of jurisdiction, the
company argues that not one of the employees to whom the cause of
action belongs receives a daily wage of more than P5,000.00, and
hence the jurisdiction of the case is determinable on the basis of the
total claim of each employee, which does not lie with the court of first
instance. And on the basis of the total amount of P113,800.00
claimed in the complaint as damages, and on the allegation that 600
union members had joined the parade, the amount pertaining to each
would be only about P189.66, which is still below the jurisdictional
sum cognizable by the lower court. chanroblespublishingcompany

After the parties had submitted memoranda in support of their

respective contentions, the court a quo issued an order requiring the
complaint to be amended by including as parties plaintiffs the real
parties in interest and the amount due to each one of them giving the
plaintiff for that purpose ten days to comply with the order. The
union submitted a motion for reconsideration. The company in turn
moved for outright dismissal of the complaint on the plea that lack of
cause of action is not correctible by amendment. The court a quo
denied both motions, but after the company had sought a
reconsideration on the ground that the union failed to amend the
complaint despite the lapse of the 10-day period given to it to do so,
the court a quo issued another order dismissing the complaint
without prejudice and with costs against the plaintiff. chanroblespublishingcompany

Hence the present appeal.

The order of the court a quo dated April 13, 1961 which requires
appellant to amend its complaint by including as parties plaintiffs
each and every one of the 600 members of the union to which they
belong and to state the individual amounts due each of them is
predicated on the following findings: chanroblespublishingcompany

“What is alleged to have been violated by defendant is the

contract of defendant with each and everyone of its employees,
individually. That being the case, the real party in interest is the
employee who has the right to receive the salary corresponding
to one day. Inasmuch as the employees concerned are not made
party plaintiffs, there is a defect of the parties plaintiff.
Moreover, the amount to which each employee is entitled
should be stated to determine whether this Court has
jurisdiction to try the case.”

Appellant disagreed with the above finding for it contends that the
basis of its complaint is not the individual contracts of employment
which its members had entered into with the company but the
collective bargaining agreement that was concluded between the
union and the company insofar as their participation in the Labor
Day parade held on May 1, 1960 is concerned wherein it was agreed
that those members who should so participate would be paid their
daily basic wage. And this is so because, it contends, before the
conclusion of said collective bargaining agreement the members of
the union did not enjoy the benefit of the provision of the Labor Day
parade contained therein and, in fact, if not because of that
agreement they would not now be entitled to such basic daily wage
even if they had participated in such Labor Day parade.

On the other hand, the company is of the view that since the provision
regarding payment is of the basic daily wage to the members of the
union contained in the collective bargaining agreement runs to the
benefit of the members concerned, not to the union, said provision
confers a right which is unique and personal to the employees with
the result that they are the ones who are the real parties in interest
with regard to the collection of their individual basic wages. And to
bolster up this contention, the company cites several cases decided in
the United States.

We are of the opinion that the complaint filed by the union comes
under the jurisdiction of the court a quo for the same is based upon
the collective bargaining agreement concluded between the union and
the company. Before the conclusion of said agreement, the members
of the union, and for that matter any employee of the company, did
not enjoy the benefit of payment of their basic daily wage even if they
should attend or participate in a Labor Day parade held on Labor
Day, since this right was only recognized when that agreement was
concluded. The basis of the right which is sought to be enforced is the
agreement itself and not the wages to be collected. The situation
would be different if the purpose of the action were merely to collect
wages that ordinarily accrue to members of the union because of work
or services rendered in connection with their employment where the
union to which the members belong would have no personality to sue
for said services in their behalf because in that case the real parties in
interest would be the laborers or employees themselves. Not so when
the wages accrue mainly on the strength of an agreement entered into
between the union and the company, as is the instant case. The action
then may be brought in the name of the union that has obliged itself
to secure those wages for its members. In this sense, the cases cited
by the company are inapplicable. chanroblespublishingcompany

In this respect, we find pertinent Section 3, Rule 3 of our Rules of

Court, wherein it is provided, among others, that a party with whom
or in whose name a contract has been made for the benefit of another
may sue or be sued without joining the party for whose benefit the
action is presented or defended, even if the court may at its discretion
order such beneficiary to be made also a party. This provision fittingly
applies to this case. The union is the party with whom or in whose
name the collective bargaining agreement in question has been
entered into for the benefit of its members and, in line with the above
rule, the union may sue thereon without joining the members for
whose benefit the action has been presented. This is especially so
when to join said members would be cumbersome because they
amount to more than 600. Verily, the court a quo erred in ordering
the dismissal of the complaint on the grounds invoked by the
company. chanroblespublishingcompany

WHEREFORE, the orders appealed from are set aside. The case is
remanded to the court a quo for further proceedings. No costs.

Bengzon, C.J., Labrador, Reyes, Barrera, Paredes, Dizon,

Regala and Makalintal, JJ., concur. chanroblespublishingcompany

Padilla, J., took no part.